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PETITIONER: TEK CHAND  (DEAD) BY L.RS. AND ORS.

       Vs.

RESPONDENT: UNION OF INDIA AND ORS. ETC.

DATE OF JUDGMENT31/08/1990

BENCH: KANIA, M.H. BENCH: KANIA, M.H. SAIKIA, K.N. (J) RAMASWAMY, K.

CITATION:  1990 SCR  Supl. (1) 126  1990 SCC  (4) 495  JT 1990 (2)    68        1990 SCALE  (2)479

ACT:     Land  Acquisition Act, 1894: Section  4--Acquisition  of land-Determining compensation thereof--Relevant factors  and circumstances --High Court placing reliance on circumstances not relevant--Matter remanded to High Court.

HEADNOTE:     Notification  under  section 4 of the  Land  Acquisition Act, 1894 was issued in respect of the appellant’s lands  in 1959  and  the  lands were acquired.  The  Land  Acquisition Collector  awarded compensation at the rate of Rs.2,000  per bigha, as also solatium and interest.     The  appellants  approached  the  District  Court  which enhanced  the  compensation  from  Rs.2,000  per  bigha   to Rs.4,000/5,000  per bigha. The appellants preferred  appeals before the High Court. Taking into account a comparable sale in  the  area few months before the Notification,  the  High Court  enhanced the compensation to Rs.7,000 per  bigha  and also  awarded  solatium and interest. The  plea  for  higher compensation  on the ground that some developed  plots  were sold by a real estate company at a higher rate was negatived since  according  to the High Court that company  was  in  a better position to develop the land and that the potentiali- ty of the land in its hands was greater.     These  appeals, by special leave, are against  the  said orders of the High Court. Allowing the appeals,     HELD:  1. In land acquisition  proceedings  compensation has  to be fixed on the basis of a hypothetical sale  at  or about  the time of the notification under section 4  of  the Land Acquisition Act of similar land by a willing seller  to a  willing buyer, there being no other factors  like  urgent need  of  money  or urgent need of the land  for  a  special purpose and so on which might depress or augment the  price. In determining this compensation the ability of a particular party  or  his lack of ability to develop the  land  and  to realise  its  potential, cannot be regarded  as  a  relevant circumstance. The High Court, therefore, was in error in 127 placing  great  reliance of the  aforesaid  circumstance  in determining  the value of the land for fixing the  compensa-

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tion. [128F-H]     2. The appellants have failed to furnish any material on record  of  this  Court on which this Court  could  fix  the proper compensation nor have any arguments been advanced  in that regard. In these circumstances, the impugned  judgments and  orders  are set aside and the appeals remanded  to  the High Court for determination of the proper compensation  for the lands acquired in accordance with law. and in the  light of our judgment. [129A-B]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeals  Nos.  1334 and 1335 of 1982.     From  the  Judgment and Order dated 9.11.1979  and  8.5. 1979  of  Delhi  High Court in L.P.A. No. 192  of  1979  and R.F.A. No. 245 of 1969. Sasidharan and P.K. Pillai for the Appellants.     Tapas Ray, A.K. Srivastava and Ms. A. Subhashini for the Respondents. The following Order of the Court was delivered:     KANIA, J. Lands comprising a few bighas belonging to the claimants (appellants) and situated in the area now known as ’Nehru Place’ in Delhi were notified for acquisition by  the Government  of  India by a Notification dated  November  13, 1959,  issued under Section 4 of the Land  Acquisition  Act, 1894. The said lands were duly acquired under the said  Act. In  compensation proceedings the Land Acquisition  Collector awarded  to the claimants (appellants) compensation  at  the rate of Rs.2,000 per bigha and further awarded solatium  and interest as provided by law. In two references under section 18 of the Land Acquisition Act at the instance of the appel- lants, the Additional District Judge enhanced the  compensa- tion  from Rs.2,000 per bigha to Rs.4,000/5,000  per  bigha. From the orders of the Additional District Judge. the appel- lants  filed  appeals in Delhi High Court.  The  Delhi  High Court  enhanced the compensation to Rs.7,000 per  bigha  and also awarded solatium and interest. Compensation was  deter- mined at the aforesaid rate largely on the footing of a sale of comparable land by 128 one  Puran  to  the Delhi Finance  Company  Private  Limited (hereinafter  referred to as the DLF Co.’). That  sale  took place a few months prior to the date of the Notification and rate  at which the land was sold was Rs.6,000 per bigha.  In view  of the period of few months which had gone-by and  the rise in land values, the High Court determined the compensa- tion at Rs.7,000 per bigha. The claimants strongly relied on the instances of ’sales of small developed plots by the  DLF Co.  and pointed out that it was on the basis of  the  sales that the High Court had awarded compensation at the rate  of Rs.11  per  sq. yard to the DLF Co. in  respect  of  similar lands  of the said company acquired by the government.  This amount was arrived at by taking the price of developed plots sold by DLF Co. and deducting therefrom the cost of develop- ment.  It  was alleged by the claimants that this  land  was contiguous  to the land of the claimants acquired as  afore- said  and the acquisition was at almost the same time as  in the case of the claimants. It was submitted by them that the principal reason given by learned District Judge as well  as the High Court for not accepting the instance of the compen- sation  awarded  to DLF Co. was not tenable in law.  It  was submitted  by them that compensation should also  have  been awarded to them on the basis of the said instance. The  High

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Court  has taken the view that the instance of  compensation awarded  to DLF Co. was not acceptable mainly  because  that company was in a position to develop the land and to realise its potentiality and had been able to sell certain developed plots  at a very much higher rates. The High Court took  the view  that the higher compensation was liable to be  awarded to  the  DLF Co. because that organisation was in  a  better position to develop the land and hence. the potentiality  of the land in its hands was greater.     With  respect  to learned Judges of the High  Court  who delivered  the impugned judgment, in our opinion,  the  view taken  by  them  cannot be sustained.  In  land  acquisition proceedings  compensation has to be fixed on the basis of  a hypothetical  sale at or about the time of the  notification under section 4 of the Land Acquisition Act of similar  land by a willing seller to a willing buyer. there being no other factors like urgent need of money or urgent need of the land for  a  special  purpose and so on which  might  depress  or augment  the  price. In determining  this  compensation  the ability  of  a particular party or his lack  of  ability  to develop  the  land and to realise its potential.  cannot  be regarded as a relevant circumstances. The High Court. there- fore,  was in error in placing great reliance of the  afore- said circumstances in determining the value of the land  for fixing the compensation. 129     We  would have proceeded to determine  the  compensation ourselves  but for the fact that the appellants have  failed to furnish any material on record of this Court on which  we can fix the proper compensation nor have any arguments  been advanced  before us in that regard. In these  circumstances, we  set aside the impugned judgments and orders  and  remand the appeals to the Delhi High Court for determination of the proper  compensation  for the lands acquired  in  accordance with law. The appeals are accordingly allowed. There will be no order as to costs. G.N.                                    Appeals allowed. 130